(Video transcript below)
Today we’re talking about how to price your house correctly when you’re planning on selling and we are starting right now.
Hey everyone, welcome back to my channel. I’m Karin Carr, a Realtor® with Keller Williams in Savannah, Georgia. If you’ve never been here before consider subscribing and hit that little bell notification icon so that you don’t miss anything important.
So you’re thinking about selling your house and you’re wondering how you come up with an accurate listing price. Well, let me tell you a few of my secrets.
First of all price per square foot means nothing.
That’s right, I said it.
It is not a good way to come up with a value for your house and here’s why. Let’s say that you live in a subdivision where a standard builder built the majority of homes. The house across the street from you is also for sale. You guys have the same floor plan, the same square footage, same number of bedrooms and bathrooms. They have laminate counters, black appliances, and vinyl floors. You have granite, stainless, and hardwood.
Are you seriously going to tell me that the price per square foot will be the same for both houses? No, it will not because the condition of your house is far superior to that house.
Instead what you ought to do is look at the houses that are currently for sale and the ones that have recently sold. Look for houses that are in your neighborhood whenever possible or the neighborhoods that are immediately adjacent to yours. Look for properties that have the same number of bedrooms and bathrooms, similar square footage, similar age, similar lot size, and similar condition. See what those houses are selling for and compare them to what the asking price was. Are they selling for 100% of the asking price? Are they selling for 90% of the asking price? Are they selling for 98% of the asking price? That will give you a good guideline of what people are asking and what the house is actually selling for.
You can also see if they offered a closing cost credit. Then when you’re coming up with your asking price you’re gonna take all of those things into consideration. You’re not simply pulling an arbitrary number out of thin air.
Besides, if I run a search in this neighborhood and I say, “Show me everything that has sold within the last 90 days,” do they all have the same price per square foot? No, they don’t. There’s a huge range, so how could you possibly say, “$XXX is an accurate price per square foot?” You really can’t in my opinion.
Now we go one step further. We look at what those homes sold for and we say, “Okay, that one had the same square footage as me but it had an in-ground pool so we have to make an adjustment to the price of the house that sold for the pool. There’s another house that’s also a three-bedroom, it’s also a two-bathroom, but it is 200 square feet smaller than my house. We have to make an adjustment to that. By doing these adjustments we can come up with a value range for your house.
So let’s say that the value range is between $225 and $230,000. We’ve narrowed it down to that range. Now we need to figure out how quickly you want to sell. How motivated are you? If you price it at the higher end of your range it might take a little bit longer to sell. If you price it at the lower end of the range it might sell easier.
If you’re right on the cusp where people are searching online… so for instance, people tend to search in $50,000 increments. They search from $150,000 to $200,000, from $200 to $250, and from $250 to $300. If you price your house at $199,000 you will reach all of the buyers that are looking in the $150 to $200 range but you’ll miss all the people that are looking in the $200 to $250 range.
So where do you price it? You might price it at exactly $200,000 so that you can reach both categories of people. If you are super motivated to sell – you need to get this sucker in contract in the next 10 days – perhaps you price it slightly below market. Because then everybody looking at it online says, “Wow! That’s a great deal! We need to run out and see this right away.” And perhaps you drive competition, you get a multiple offer situation going on. You get your pick of offers to choose the one that you felt was the strongest and has the best chance of going through without a hiccup.
Whatever you do, do not use a Zestimate.
Don’t do it. Just say no. NOOOOO!
And here’s why. Online calculators like Zillow and other property valuation tools that do it online… they’ve never been inside your house. How can they possibly tell what the condition of your house is when they are going off nothing more than what the tax records say? It is a four-bedroom/two-bath and it’s 1,800 square feet and it’s on a quarter of an acre. Awesome. So is every other house in the neighborhood (roughly.) So how can we tell what yours is worth if we’ve never even been inside of it before? And therefore the Zestimate is worthless.
They have a huge margin of error and people who fixate on the Zestimates are usually sorely disappointed when a real estate agent comes to their house to tell them what the house is actually worth. Sometimes Zillow completely underestimates the value of the house but more often than not it overestimates the value of the house. So don’t give in to temptation. Just don’t even go there.
So now you know some tips to help you come up with an asking price when you’re ready to sell your house. But do you want to do this yourself? f you don’t, just click over here where you can get a free home valuation with no obligation whatsoever.
First time here? Consider subscribing to my channel. I post new videos every Monday about all things real estate in the Savannah area. Thanks so much and we’ll see you at the next one.